Small Business – What is it and Why Do You Need One?

A business is defined by the IRS as a legally established entity or corporation organized for the purpose of conducting the trade or commerce. The state also enters into an agreement with the IRS on behalf of the business and pays taxes according to the agreed upon tax amount each year. A business may be any type of business including partnerships, sole proprietorships, LLCs, DBA’s, corporations, joint ventures, cooperatives, partnership arrangements, government agencies, nonprofits, etc. An individual may also establish a business as a sole proprietorship or a partnership. Business owners need to obtain a license for running a business in all 50 states in order to sell and deliver products or services directly to the public or to sell goods and services on the Internet.

Business goals are essential to the success of any business organization. These objectives must be carefully designed to achieve reasonable goals and realistic predictions about economic performance. The objective of the business should be detailed and include both short term and long term indicators. The objectives of a business may include reducing cost, increasing profits, increasing market share, attracting new customers, decreasing prices, decreasing inventory, building market share, and etc.

A business plan is required for most businesses to ensure their success. This document outlines in detail the financial forecast of the business, including both revenue and expense projections, and identification of the resources needed to carry out the business’s objectives. A business plan should be used to: Prepare the financial reports required by the state and federal governments; hire or retain the best management personnel; sell or transfer ownership of businesses; and develop and implement effective marketing and advertising programs. Many states require businesses to submit annual financial reports to their insurers. Business owners must keep these reports up to date and make changes to the business plan as circumstances change.